Feb 23 The Problem With Selling Images from Your Website in the EU

How the New Vat Rules from Jan 2015 affect Image Download Services

Until this January, if you wanted to sell digital image downloads from your own photography website, and you were based in the EU, it was a relatively simple process. You could host your images on one of the services which offer simple ways to sell downloads to your clients, such as Photoshelter, SmugMug or Zenfolio. However, since the new EU Vat rules came in to effect in January, if you use any of these services to sell images to a customer in the EU, you may be breaking the law. The simple reason is that none of these services support the necessary vat rules.

Disclaimer: I’m basing this post on my understanding of the Law. I am not a lawyer or accountant, so please seek professional advice before acting on any of the information below.

In case you missed it, the new rules for EU Vat require that anyone selling digital content in the EU charge Vat at the rate of the customer’s country (previously it was at the seller's rate), and you must collect two non conflicting pieces of evidence that the customer is in that country. This is usually something like a credit card billing address and the computer ip address. Most of the afore mentioned services have not updated to allow you to charge customers based on their country rate. Photoshelter for example, which I use seems to treat Vat as if it was no different from the American system of state based sales tax. I have approached the company in the past about its handling of VAT and the people I was in contact with didn’t seem to understand the issue, and I don’t think they appreciate the situation this puts Photoshelter's EU customers in. I don't want to single Photoshelter out either, because the other three have similar problems. If you’re using these services to sell prints, that’s ok, however for image downloads, I strongly recommend that If you’re in the EU, and you’re using any of these services, that you seek the advice of a tax accountant or solicitor if you want to continue using them.

The question then is what to do now. It’s a difficult situation, as I can’t find any solution out there that’s as seamless as using Photoshelter or SmugMug, that also supports the correct handling of EU vat. If anyone knows of one, please let me know.

The only possible solution that I can come up with is trying to create your own solution using Woo Commerce. WooCommerce is the system that I use for my Preset store. It’s a Wordpress e-commerce plug in and it supports the new EU vat rules through a portal called Taxamo.

The only problem with this approach, is that setting up Images for sale, one would have to set up each image as individual products, and each would have to be done one at a time, with each variation also manually prepared in advance. This would be difficult and a lot of work. There is a add-on for WooCommerce for photographers that promises to automate much of this but I haven’t tried it yet.

I want to avoid being political about this, and I do get the reasoning behind the new rules. They wanted to prevent big corporations basing their business in countries with the lowest vat rate, but in the process they’ve really screwed things up for the little guy. If anyone knows of any solutions, or any other services like SmugMug and Photoshelter that properly support charging Vat please leave the details in the comments below.

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